CarMax Closes Fiscal Year with Big Gains in Used Car Sales

Car­Max, the nation’s largest retail­er of used vehi­cles, just report­ed very strong results in used car sales for it recent­ly end­ed fis­cal year and fourth quar­ter. It was a record-break­ing sales year for Car­Max.

It was the first fis­cal year the com­pa­ny ever retailed more than 500,000 vehi­cles as it saw a near­ly 20% gain in used vehi­cle sales. Total used units increased 12% in the fourth quar­ter and 18% for the fis­cal year. The retail chain sold 526,929 used units for the fis­cal year and 132,856 in its fourth quar­ter.

Earn­ings for used vehi­cles sold also saw an increase for Car­Max. Used vehi­cle gross prof­it came in at $284.4M in Q4 – up from $253.3M dur­ing Q4 2013.

An increase in vehi­cle lend­ing has helped dri­ver prof­its at many deal­er­ships. At the end of 2013, Car­Max said it would start lend­ing to sub­prime bor­row­ers to increase its rev­enue and prof­its with cred­it-chal­lenged cus­tomers – and it’s a chan­nel for increas­ing sales of old­er-mod­el used vehi­cles.

Tom Fol­liard, pres­i­dent and CEO of Car­Max, made a few points on the company’s fis­cal year used car prof­its:
• CarMax’s com­pa­ra­ble store used unit sales growth of 12% was its strongest since fis­cal year 2002.
• The com­pa­ny believes that its con­tin­ued geo­graph­ic expan­sion and mar­ket share growth will dri­ve its suc­cess in years to come.
• Car­Max was able to end the year strong­ly even though harsh weath­er con­di­tions through every­thing off in Jan­u­ary and Feb­ru­ary. Fol­liard said there was one day when over 30 of its stores were closed, along with days when the entire Dal­las mar­ket closed. His­tor­i­cal­ly, Car­Max has expe­ri­enced that it will even­tu­al­ly get those sales back.

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